Matt Stoller: The Egyptian Labor Uprising Against Rubinites � naked capitalism
Matt Stoller: The Egyptian Labor Uprising Against Rubinites
By Matt Stoller, the former Senior Policy Advisor for Rep. Alan Grayson. His Twitter feed is @matthewstoller
Via Wikileaks, we learned that the son of the former President of Egypt, Gamal Mubarak, had an interesting conversation in 2009 with Senator Joe Lieberman on the banking crisis. Gamal is a key figure in the forces buffeting Egypt, global forces of labor arbitrage, torture, and financial corruption. Gamal believed that the bailouts of the banks weren’t big enough – “you need to inject even more money into the system than you have”. Gamal, a former investment banker trained at Bank of America, helped craft Egypt’s industrial policy earlier in the decade.
Our purpose is to improve Egyptians’ living standards. We have a three-pronged plan to achieve this: favoring Egypt’s insertion into the global economy, reducing the state’s role in the economy, and giving the private sector greater freedom.
Deregulation, globalization, and privatization. This should be a familiar American recipe, commonly associated with former Treasury Secretary and Goldman Sachs chief Bob Rubin. That Rubinite rhetoric has been adopted by the children of strongmen shows the influence of Davos, the global annual conference of power brokers. Gamal, far more polished than his father, understood that the profit and power for his family lay in cooperating with foreign investors to squeeze labor as hard as possible.
This strategy was targeted at the global labor arbitrage going on since the 1970s, with Egypt’s role as one cheap labor in-sourcer. It’s no surprise that the Mubarak family has $40-70B stashed away in the global tax safe havens coddling the superrich. This wealth was extracted from the youth and women in Egypt’s new factories making low-cost goods for export. This is why the revolution was spearheaded by youth and women, and why the nationalist business elite, with its deep ties to the military, sided with the protesters. Mubarak’s inner circle aligned themselves with international investors and set themselves against domestic business and military interests.
In other words, this is a revolt against Rubinite economic policy. Even the rhetoric Gamal used in pushing his policies echoes that of Rubinites. This Orwellian model of discourse frames corrupt decision-making to confiscate wealth from ordinary people as “tough-minded” because it’s “unpopular.” Here’s Gamal:
Bringing change is always a harsh task. You must sometimes accept unpopularity. But if you are really convinced that you are making the right decision, you must stick to it. Modernization is worth this price. If not, we will have to be honest both with ourselves and public opinion and acknowledge that we failed. I am perfectly aware of what the consequences of such a failure could be, and I am doing my best. I know that our action will later be examined scrupulously. This is what we call a “result-oriented culture.”
You can smell the McKinsey presentation. Here’s Obama’s budget director, ex-Citigroup executive Jacob Lew who made millions on the housing bubble, justifying his cuts to the social safety net (such as low income heating assistance, which means some poor people will freeze to death):
These three examples alone, of course, represent only a small fraction of the scores of cuts the president had to choose, but they reflect the tough calls he had to make.
And here’s George W. Bush, justifying his decision to invade Iraq:
And so what I’m telling you is that sometimes in this world you make unpopular decision because you think they’re right.
The political architecture of the Mubarak regime was directly pulled from the neoliberal shadow government model, right down to the political rhetoric of toughness as a mask for theft. Paul Amar has by far the most persuasive account of the Egyptian revolution. Amar goes beyond the absurdist Facebook revolution narrative, and points out that what is going on is in effect a youth-driven labor uprising, combined with fights between Mubarak-centric Rubinite elites and the domestic nationalist business community tied to the military. Mubarak had made tight alliances with the Islamic right, while slashing the social safety net and bringing in international investors to open low wage manufacturing (this is part of Mubarak’s son’s Bank of America training, more on that below).
By Matt Stoller, the former Senior Policy Advisor for Rep. Alan Grayson. His Twitter feed is @matthewstoller
Via Wikileaks, we learned that the son of the former President of Egypt, Gamal Mubarak, had an interesting conversation in 2009 with Senator Joe Lieberman on the banking crisis. Gamal is a key figure in the forces buffeting Egypt, global forces of labor arbitrage, torture, and financial corruption. Gamal believed that the bailouts of the banks weren’t big enough – “you need to inject even more money into the system than you have”. Gamal, a former investment banker trained at Bank of America, helped craft Egypt’s industrial policy earlier in the decade.
Our purpose is to improve Egyptians’ living standards. We have a three-pronged plan to achieve this: favoring Egypt’s insertion into the global economy, reducing the state’s role in the economy, and giving the private sector greater freedom.
Deregulation, globalization, and privatization. This should be a familiar American recipe, commonly associated with former Treasury Secretary and Goldman Sachs chief Bob Rubin. That Rubinite rhetoric has been adopted by the children of strongmen shows the influence of Davos, the global annual conference of power brokers. Gamal, far more polished than his father, understood that the profit and power for his family lay in cooperating with foreign investors to squeeze labor as hard as possible.
This strategy was targeted at the global labor arbitrage going on since the 1970s, with Egypt’s role as one cheap labor in-sourcer. It’s no surprise that the Mubarak family has $40-70B stashed away in the global tax safe havens coddling the superrich. This wealth was extracted from the youth and women in Egypt’s new factories making low-cost goods for export. This is why the revolution was spearheaded by youth and women, and why the nationalist business elite, with its deep ties to the military, sided with the protesters. Mubarak’s inner circle aligned themselves with international investors and set themselves against domestic business and military interests.
In other words, this is a revolt against Rubinite economic policy. Even the rhetoric Gamal used in pushing his policies echoes that of Rubinites. This Orwellian model of discourse frames corrupt decision-making to confiscate wealth from ordinary people as “tough-minded” because it’s “unpopular.” Here’s Gamal:
Bringing change is always a harsh task. You must sometimes accept unpopularity. But if you are really convinced that you are making the right decision, you must stick to it. Modernization is worth this price. If not, we will have to be honest both with ourselves and public opinion and acknowledge that we failed. I am perfectly aware of what the consequences of such a failure could be, and I am doing my best. I know that our action will later be examined scrupulously. This is what we call a “result-oriented culture.”
You can smell the McKinsey presentation. Here’s Obama’s budget director, ex-Citigroup executive Jacob Lew who made millions on the housing bubble, justifying his cuts to the social safety net (such as low income heating assistance, which means some poor people will freeze to death):
These three examples alone, of course, represent only a small fraction of the scores of cuts the president had to choose, but they reflect the tough calls he had to make.
And here’s George W. Bush, justifying his decision to invade Iraq:
And so what I’m telling you is that sometimes in this world you make unpopular decision because you think they’re right.
The political architecture of the Mubarak regime was directly pulled from the neoliberal shadow government model, right down to the political rhetoric of toughness as a mask for theft. Paul Amar has by far the most persuasive account of the Egyptian revolution. Amar goes beyond the absurdist Facebook revolution narrative, and points out that what is going on is in effect a youth-driven labor uprising, combined with fights between Mubarak-centric Rubinite elites and the domestic nationalist business community tied to the military. Mubarak had made tight alliances with the Islamic right, while slashing the social safety net and bringing in international investors to open low wage manufacturing (this is part of Mubarak’s son’s Bank of America training, more on that below).
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